You are Superman, and debt is your Kryptonite. If you're already
Financially Competent(or
think you are) you can probably come up with a dozen situations where
debt is actually a good idea. In some of them, you'd actually be right.
But if you're Financially Competent enough to use debt correctly, you're
not in the target audience for these Financial Competence
articles. If
you're still striving for Financial Competence, as I am, your primary
goal should be to eliminate all debt. Your recipe is simple:

What's our situation? Through the tiny amount of Financial Competence my
wife and I had before we got married, neither of us has any credit-card
debt. My wife has a student loan currently charging 5.12%, and I owe
back taxes to the IRS that are currently accumulating interest and
penalties at 3.25%. We're paying the minimum on my IRS debt, and putting
every penny we can save into paying off my wife's student loan. If
we're reasonably diligent, we can pay off the student loan in two
years. If we can manage to save more than 30% of our gross income, we
can do it in one year. And it may be another year after that before
my IRS debt is paid off. That's three years to be debt free, and
three years before we can start accumulating assets and investing
them. But every dollar we put towards the student debt earns us a
5.12% return. While we might be able to get higher returns by
investing, we also might get lower returns. The return on paying off the
debt is guaranteed. Every $1,000 we put towards the student loan
earns us $51.20.